AMENDED AND RESTATED
SEVENTH ALLONGE TO SECURED PROMISSORY NOTE
WHEREAS, the parties entered into a Seventh Allonge to Secured Promissory
Note dated August 24, 1999, attached to and forming a part of the Secured
Promissory Note, dated January 26, 1999, made by THE NETWORK CONNECTION, INC., a
Georgia corporation ("MAKER"), payable to the order of Interactive Flight
Technologies, Inc., a Delaware corporation, now known as Global Technologies,
Ltd. ("PAYEE"), in the original principal amount of $500,000 and in the
principal amount as of the date hereof of $3,122,757.
WHEREAS, the Seventh Allonge contained an inaccurate description of the
conversion calculation set forth in Paragraph 16;
WHEREAS, the parties now wish to amend and restate the Seventh Allonge to
correctly reflect the intent of the parties;
NOW THEREFORE, the parties agree that the Seventh Allonge is hereby amended
and restated to read in its entirety as follows:
ALLONGE, dated effective as of August 24, 1999, attached to and forming a
part of the Secured Promissory Note, dated January 26, 1999, as amended by the
Allonge to Secured Promissory Note dated January 29, 1999, the Second Allonge to
Secured Promissory Note dated March 19, 1999, the Third Allonge to Secured
Promissory Note dated March 24, 1999, the Fourth Allonge to Secured Promissory
Note dated May 10, 1999, the Fifth Allonge to Secured Promissory Note dated July
16, 1999, and the Sixth Allonge to Secured Promissory Note dated August 9, 1999
(collectively, the "NOTE"), made by THE NETWORK CONNECTION, INC., a Georgia
corporation ("MAKER"), payable to the order of GLOBAL TECHNOLOGIES, LTD., a
Delaware corporation ("PAYEE"), in the original principal amount of $500,000 and
in the principal amount as of the date hereof of $3,122,757.
1. In consideration of the payment by Payee of certain obligations of
Maker, the principal amount of the Note is hereby increased by One Million Two
Hundred Thousand Dollars ($1,200,000) to Four Million Three Hundred Twenty-Two
Thousand Seven Hundred Fifty Seven Dollars ($4,322,757). Accordingly, the first
paragraph of the Note is hereby amended as follows:
FOR VALUE RECEIVED, the undersigned, The Network connection, Inc., a
Georgia corporation (the "MAKER"), hereby promises to pay to the order
of Interactive Flight Technologies, Inc., a Delaware corporation, its
successors and assigns (the "PAYEE"), the principal sum of Four
Million Three Hundred Twenty-Two Thousand Seven Hundred Fifty-Seven
Dollars ($4,322,757), together with interest on the outstanding
principal balance thereof accrued from the date hereof: (a) at the
fixed rate of 9.5% per annum in respect of all periods during which no
Event of Default (as such term is hereinafter defined) is continuing;
and (b) at the fixed rate of 12.5% in respect of all periods during
which any Event of Default is continuing. All payments of principal
and/or interest shall be paid in lawful money of the United States of
America in immediately available funds to an account designated by
Xxxxx.
2. Paragraph 16 is hereby amended and restated in full to read as follows:
16. CONVERSION RIGHTS. Payee shall be entitled, at any time and from
time to time and in its sole discretion, to convert all or a portion of the
principal amount and accrued interest due under this Note into shares of
the Maker's Series C 8% Convertible Preferred Stock, $.01 par value, Stated
Value $1,000 per share (the "PREFERRED STOCK") or, at the option of Payee,
into the Maker's Common Stock (the "COMMON STOCK"). Any such conversion
into Preferred Stock shall be effected at the rate of one share of
Preferred Stock for each $1,000 due hereunder which Xxxxx has elected to
convert (the "CONVERSION RATE"). If Payee elects to convert all or a
portion of the principal amount and accrued interest due under this Note
directly into the Common Stock, the number of shares to be issued shall be
calculated as if such amount had first been converted to Preferred Stock
hereunder (calculated without regard to any insufficiency of authorized
shares of Preferred Stock) and such resulting shares of Preferred Stock
had, in turn, immediately been converted to Common Stock at a conversion
price per share equal to the lowest of (a) $1.50, (b) 66.67% of the Average
Price (as hereafter defined), (c) the price per share at which the Maker,
after the date of this Allonge, issues and sells any Common Stock, or (d)
where coupled with the right of the purchaser(s) thereof to demand that the
Corporation register under the Securities Act of 1933 any Common Shares
(not theretofore registered) for which any warrants or options may be
exercised or any convertible, exchangeable or exercisable securities may be
converted, exercised or exchanged, (i) the exercise price of any such
warrants or options issued by the Maker after the date of this Allonge, or
(ii) the conversion rate, exchange rate or exercise price, respectively, of
any such convertible, exchangeable or exercisable security issued by the
Maker after the date of this Allonge, except for stock option agreements or
stock incentive agreements issued pursuant to employee benefit plans. For
purposes of this Paragraph 16, the term "Average Price" per share of Common
Stock means the average of the closing bid prices as reported on the Nasdaq
Stock Market (or if not then traded on such market, on such exchange or
quotation system where such shares are then traded) for the lowest five of
the twenty trading days immediately preceding the Conversion Date.
-2-
Payee may elect to convert by delivering to Maker, by facsimile, telecopier
or other expedient means of transmission, a notice of conversion stating
(i) the principal amount and/or accrued interest to be converted, (ii) the
number of shares of Preferred Stock or Common Stock to be issued as a
result of such conversion; and (iii) the person(s) in whose name the
Preferred Stock or Common Stock is to be issued. The conversion of any
portion of this Note and the resulting issuance of Preferred Stock or
Common Stock shall be effective upon the date that Maker receives the
corresponding notice of conversion, and Maker shall deliver to Payee one or
more certificates evidencing such shares no later than five days following
such effective date. Upon a conversion of all amounts due hereunder, Xxxxx
shall deliver the original Note (including all Allonges), marked "PAID," to
Maker no later than five days following the delivery to Maker of the
conversion notice. In the event of a conversion of less than all amounts
due hereunder, (A) no principal amount under the Note shall be deemed
converted unless and until all accrued interest under the Note shall be
first converted; and (B) the portion of the amounts due hereunder that are
so converted shall be deemed repaid. The parties shall mark on the grid
attached to the Fourth Allonge to Secured Promissory Note dated May 10,
1999 the facts related to such partial conversion and shall confirm the
accuracy of the entry by signing next to each such entry.
3. Any agreement to subordinate, or any subordination, of the indebtedness
represented by the Note to bank or finance company indebtedness, which may
heretofore have been given by Payee, is null and void and of no force or effect.
Maker represents and warrants to Payee that since execution of the Note, Xxxxx
retains a first priority security interest in the Collateral granted by Maker to
Payee pursuant to that certain Security Agreement dated January 25, 1999 as
amended, ("SECURITY AGREEMENT"). The Maker's obligations under the Note, as
amended hereby, shall be and are deemed to be secured by the Collateral and
subject to the terms of the Security Agreement, all of which are confirmed and
ratified as of the date hereof, including, but not limited to, all of the
representations, warranties and covenants therein.
4. In all other respects, the Note is confirmed, ratified, and approved
and, as amended by this Amended and Restated Seventh Allonge, shall continue in
full force and effect.
IN WITNESS WHEREOF, Maker and Payee have caused this Amended and Restated
Seventh Allonge to be executed and delivered by their respective duly authorized
officers on this 10th day of December, 1999, to be effective as of the day and
year first above written.
THE NETWORK CONNECTION INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------
Xxxxxx X. Xxxxx
Accepted and agreed to:
GLOBAL TECHNOLOGIES, LTD.
By: /s/ Xxxxx X. Xxx
-------------------------
Xxxxx X. Xxx
